The Canadian dollar (CAD) is weakening against the U.S. dollar (USD), which is pushing the benchmark USD/CAD Forex market higher. There is also a bullish chart formation in play as the Forex market has confirmed a head and shoulders chart pattern during the morning Asian trade session.
The Canadian dollar, which has a lot of exposure to the crude oil futures contracts, especially the West Texas Intermediate (WTI) crude oil futures contract, is following the price of oil lower. There is a lot of concern with too much supply and too little demand for the black gold which is pressuring the spot oil contracts lower.
There is also some concern with the Covid-19 (coronavirus) pandemic which is continuing to spread in the United States, European Union and the United Kingdom which is supporting the U.S. dollar.
Today’s Canadian economic calendar is light with no macroeconomic events on the schedule. The world’s largest economy, the United States is also fairly light. The Richmond Federal Reserve will publish their monthly manufacturing index and the U.S. will also publish monthly existing home sales data.
The European Union is releasing monthly consumer confidence data. The United Kingdom is publishing their monthly public sector net borrowing data. The UK will also publish the private monthly CBI industrial orders expectation index.
Daily Canadian Dollar Technical Analysis (USD/CAD)
Looking at the above daily MT 4 chart, the USD/CAD currency exchange rate is trading at its highest price level in nearly 18 months. The technical indicators, like the 14 day relative strength index (RSI) are near overbought conditions couples with this inverse head and shoulders pattern could keep the greenback’s gains in check, for now.
With that said, the first upside barrier to watch lines up at the monthly high price point for August at 1.34 with the 30 July high price point at 1.3460 then coming into play. The late June high price point at 1.3485 then comes into play with the key upside barrier at 1.35 possibly coming into focus.
The first layer of technical support is at the fifty (50) day simple moving average at 1.3265 and the neckline support at 1.3245. A daily close below the neckline support opens the door to challenge a congestion zone in play at 1.3130 to 1.3125.